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Flat rate expenses, or work-related expenses, are a kind of tax relief for employees. They are called "flat rate" expenses because you can claim a flat rate of tax relief set by the government instead of the individual costs.
The flat rate expenses scheme makes it easy to claim tax relief if you’ve had to use your own money for:
Flat rate expense deductions apply to those who work in trades and industries in which there are common and essential job-related expenses. In some cases trade unions have agreed with the tax office an amount to cover the annual job-related expenses typically incurred by employees in a specific trade.
To be eligible to claim flat rate expenses in the last 4-years you must have had to:
You must also:
After you claim for these your tax code will then be adjusted to take account of your expenses. If you are making a full tax rebate claim for travel expenses or filing a self assessment claim with us all expense claims will be covered as part of that service and there is no need to apply separately.
If you're used to getting your hands dirty and taking care of your finances, then you probably already know a bit about claiming expenses.
You can only claim flat rate expenses if you are a employee. However, if your employer has already paid back your expenses to you directly you won’t be able to make a claim. You can make a claim using the P87 form. Once you’ve claimed, your tax code will change to automatically give you the tax relief each year so you won’t have to claim again. If your expenses change, it's up to you to notify HMRC.
Not all refunds come from huge, one-off costs - and it’s easier to get money back than you think. Our tax refund calculator can also help you discover what you're owed. It takes less than a minute to complete and gives you an instant estimate.
The amount you can claim depends on your circumstances. The lowest flat rate expense you can claim is worth £60 per tax year. Many trades and industries have higher flat rate expenses, for example a joiner can claim £140 per tax year.
Ignoring the cash you're splashing on those smaller, but still essential things, could be costing you. They stack up fast, and a lot of people are missing out without ever knowing.
Do you need a uniform or specialised clothing for your job? Those safety boots you're buying yourself have to be cleaned or repaired, so should probably be claimed as expenses. If you're responsible for providing or fixing your own tools or equipment, then the money you spend on them should be bringing down your tax bill.
When it comes to those smaller, everyday expenses, it’s easy to think they’re not worth the paperwork of claiming for every cost individually. That's the trap too many people fall into but the good news is that you don’t have to. You can claim flat rate expenses instead.
What qualifies as an expense depends on the business you're in. It only applies to things that you specifically need for your work, but generally you're looking at things like:
At the end of the day, it's your money and it ought to be in your own pocket. The flat rate scheme is HMRC's way of playing fair with your expenses without making you jump through a lot of hoops to claim them. Our tax rebate calculator can help you discover if you're due a tax rebate.
Flat rate expenses are based around the idea that HMRC has a pretty good handle on what it costs to keep yourself in business. They're set amounts that you can claim, meaning you don't have to go through the grind of calculating all your expenses by hand.
The amounts themselves vary according to the kind of work you do, but even if your specific occupation isn't listed you might be able to claim the standard £60 in tax relief each year.
If you choose to sort out your expenses this way, you can forget all the hassle of collecting receipts and keeping records of what you've spent. You have to be sure that your costs actually qualify, but the system does away with all the number crunching and bookkeeping of claiming for everything separately. You'll be sure you've only paid the tax you need to, and can claim a tax refund if you've already paid too much.
Simplified expenses are a way for sole traders or partnerships to calculate business expenses for vehicles, working from home, and living on business premises. The idea is similar to flat rate expenses (making it easier to claim common amounts as set by the government) but they are for self-employed people, not employees.
To claim simplified expenses you must be either:
Simplified expenses CANNOT be used by limited companies or business partnerships involving limited companies.
If you wish to use simplified expenses, you simply enter the relevant amounts on your self assessment tax return. You can see a list of what you can claim for using flat rate expenses on the HMRC website. You must calculate all other expenses by working out the actual costs.
The VAT flat rate scheme is designed to be a simpler way of calculating your VAT. Under the normal system, you pay HMRC the difference between the amount you charge your customers and the amount you pay to suppliers. There's a lot of paperwork involved, and it tends to cause plenty of headaches.
Flat rate VAT means you pay a set amount of VAT to the taxman, and keep all the VAT you're charging customers. The drawback of flat rate VAT is that you generally can't reclaim the VAT you pay on purchases, though. For more information on how to submit a VAT return online click the button below.
The UK’s tax laws are a maze of deadlines, exemptions and penalties. RIFT’s tax refund specialists are the best in the business at handling the complex details of rebate claims. From calculating mileage and other tricky expenses to protecting your refund from HMRC enquiries, RIFT keeps online tax rebate claims simple, stress-free and safe.
We've claimed back over £281 million for over 160,000 people in the form of military tax refunds, construction tax refunds and more like you since 1999. We look after every claim on an individual basis so we can do what is best for you.
Use the List of Industries and Occupations table on the HMRC website to find out if you're eligible to claim and for how much.
When you claim your tax refund with RIFT, our unique RIFT Guarantee means that you don't have to worry about the taxman reclaiming any of your money. So long as you give us full and accurate information, if HMRC disagrees with the amount that we've claimed and ask for the money back, we'll pay it. It won't cost you a penny.
18th November 2024
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